Will the Post Office Buy the Farm?

Brett Savage
21 . 08 . 11

In a 1997 episode of Seinfeld entitled "The Junk Mail," Kramer, disgusted by receiving an inordinate number of Pottery Barn catalogs, attempts to cancel all postal delivery to his address. Postal employee Newman asks Kramer how he expects to continuing communicating without the reliable benefit of the postal service's efforts. In response, Kramer tacks off a list of alternative methods of communication he believes had rendered the Post Office obsolete—"e-mail, telephone, fax machine, FedEx, Telex, telegrams...holograms." What was a humorous scenario in 1997 is reality today (except for the holograms). A recent article in The Economist hints that the Post Office might not survive in the Internet age.

The article has some interesting things to say about the state of the Post Office today:

• In 2000, 5% of Americans paid utilities online. Last year, 55% did. Going "Green" is hurting the Post Office's bottom line

• The Post Office is obligated to visit every mail box, no matter how remote, which drives up the cost of each piece of mail

• Already, at least for Americans under a certain age, the post delivers only bad news or nuisances, from jury summonses to junk mail

• With total mail volume plummeting, the Post Office has lost $20 billion in the past four years, and expects to post an $8 billion loss this year

• The Post Office plans to close 3,653 of its approximate 32,000 locations, and lay off another 120,000 of its roughly 560,000 employees

Clearly, things are not going great. Patrick Donahoe, the current Postmaster General, cites (not at all encouraging) precedent for believing the Post Office will overcome this most recent challenge to its existence by the attack dogs of technological advancement—"In 1910, we owned the most horses, by 1920 we owned the most vehicles." By this logic, unless there's a way to "own the most Internet," straits might be dire.

Contrary to popular assumption, this is not the drag on U.S. taxpayers you might think. The New York Times says that while the Post Office used to be supported by tax revenue, things changed in 1970, when it was reinvented as an independent entity with federal oversight.

How do you feel about the potential loss of the postal service? Seems strange to lose something that's been around as long as the country has been, but maybe it's just another example of the creative destruction that's an integral part of a capitalist economy.

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